Drea budgets $50 for entertainment, which for her includes going to the movies or to basketball games at her college. She pays $8 for movie tickets and $15 for tickets to basketball games. The combination of four movie tickets and two basketball game tickets lies inside Drea's budget line. True O False

Drea budgets $50 for entertainment, which for her includes going to the movies or to basketball games at her college. She pays $8 for movie tickets and $15 for tickets to basketball games. The combination of four movie tickets and two basketball game tickets lies inside Drea's budget line. True O False

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Ethan has $17 per week in his food budget. He splits his choices between pizzas and hot dogs. Each slice of pizza costs $2 while each hot dog costs $3. The total utility (TU) from each of these choices is set out in the table below. Marginal utility for pizza and hotdog (MU/$) for TU MU MU pizza hotdog Units TU pizza pizza hotdog 1 10 5 2 18 9 3 20 12 4 22 15 5 23 17 1. Complete the table calculating marginal utility (MU) and marginal utility per dollar (MU/$) for both choices. Remember to show your work for at least one unit! 2. What is Ethan's utility maximizing choice? Justify your answer by showing your work! HINT: use the budget constraint equation to show the optimal choice! (MU/$) for hotdog
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